Market Recap: RISI Crow's Construction Materials Cost Index

Crow's Market Recap -- A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.

Lumber: Mirroring the week prior, demand for SPF lumber increased at midweek, due in part to a strong gain in Wednesday's lumber futures. Mills reported selling more 2x6 #2&Btr than the prior week, when 2x4 dominated sales. Early perceptions that some Southern Pine #2 prices were nearing a bottom were refuted later in the week, as discounts remained plentiful. In a historical perspective, some prices were near or at levels that might seem like a bottom, but availability was still plentiful and demand modest. Price decreases in the Coastal species lumber market were less apparent early than in previous weeks. Heightened demand as the week progressed firmed much of the lingering softness, leaving most prices close to levels reported the previous week. After a slow start, fill-in buying at the end of the week helped firm up the Inland species lumber markets. Sales of 4-in. Sterling Idaho White Pine were reported from $725 up to $740, depending on tally. Eastern White Pine producers reported improved sales to home centers, although prices remained flat. Radiata Pine activity has quieted after a brief uptick in activity. Prices are flat, with the exception of 5/4 Shop, which seems to be "backing up a bit." Persistent production cutbacks continued to bring supplies in balance with minimal demand, but Western Red Cedar prices overall were flat with a tendency toward softness.

Panels: OSB markets were generally weak, and prices in some regions came off. Overall activity was quiet. Producers were able to sell partway through the short holiday week, and some were sold out into the week of Sept. 12. Steady sales activity and overall price strength in the Southern Pine plywood market brought about what many traders deemed "the best market of the year." Not only were rated sheathing prices edged higher, sanded panel and underlayment prices remained firm or were increased modestly. Moderate trading, notably less than the Southern Pine plywood market, left Western Fir plywood prices near levels posted the prior week. A perception that the Northeast may need greater volumes to shore up damage to homes before the winter sets in did exist. Order files into the week of Sept. 26 or Oct. 3 kept producers firmly in control of the Canadian plywood market. Secondaries continued to take positions and sell off earlier purchases at replacement prices. Particleboard and MDF producers tried to keep production in line with limited demand while looking forward to what they hope will be improved consumption in September.